Pacific Coast Biscuit Co. v. Commissioner

MdbdocK,

dissenting: The prevailing opinion holds that a fee paid in connection with the amendment of a corporate charter may be deducted as a “ loss ” upon dissolution of the corporation; amounts expended in connection with the dissolution and liquidation of the corporation are deductible in the year of dissolution as “ordinary and necessary expenses ”; but that fees paid in connection with the retirement of capital stock and the issue and sale of new stock can not be deducted as a “ loss ” upon dissolution. I am unable to distinguish between the two kinds of fees so as to hold that one is deductible and the other not. I do not agree that the amounts expended in connection with the dissolution and liquidation of the corporation are deductible under section 23 (a). I am unable to find any statutory authority allowing a deduction for any of these expenditures.

SterNhageN and McMahoN agree with this dissent.